Bank in Maxine Waters case was weakest to get TARP help

Cong Maxine Waters (D-LA) is alleged to have set up a meeting with regulators to help a bank, on whose board her husband served. OneUnited is based in Boston, but it has major operations in LA and Miami and received a $12.1M capital injection from the US Treasury Dec. 19, 2008. The money has not been repaid.

When then-Treasury Secy Paulson announced creation of the so-called "Capital Purchase Program" Oct 2008, it was directed at "healthy institutions." None of the 987 banks that got TARP money between Oct 2008-Dec 2009 reported a lower (rating) than OneUnited. On Oct. 27, 2008, the FDIC and Massachusetts Division of Banks issued a cease-and-desist order which is still in effect; the agencies "had reason to believe OneUnited had engaged in unsafe or unsound banking practices and violations of law." The order cited its capital position, poor oversight of officers, "excessive" executive compensation, weaknesses in loan underwriting and "speculative investment practices." The agencies gave the bank a detailed plan of corrective action. It has not yet met those goals.

My favorite part of the House ethics report on Waters: the economy was tanking. Lehman Brothers was about to go down. But when Waters, a senior member of the Financial Services Committee calls, the Treasury Secy tends to listen. Waters said she had "some people in town who were important to her," then-Secy Paulson recalled, and she asked for a meeting with Treasury officials to discuss their concerns..............

When Rep Maxine Waters (D-Cali), called then-Treasury Secy Henry M. Paulson Jr. in late 2008 to ask him to host a special meeting that would feature a California bank executive she knew well, was the request on behalf of a trade association, or a bank in which her husband owned stock? That question will be among those raised at an ethics trial expected to unfold this fall, House officials predicted, after Ms. Waters became the second House member to indicate last week that she would challenge an allegation of violating House ethics rules.

The specific charges to be filed against Ms. Waters have not been made public. But House officials confirmed that the case involved communications Ms. Waters had in fall 2008 with federal officials that at least indirectly touched on the fate of OneUnited, a Boston-based bank with branches in Massachusetts, Florida and California. At the time of Ms. Waters’s phone calls, her husband, Sidney Williams, had recently resigned as a board member of OneUnited but still owned stock in it.

OneUnited, like many banks at the time, was in a desperate position after losing $50 million worth of stock it had held in the housing finance companies Fannie Mae and Freddie Mac, following their federal takeover.

Ms. Waters’s lawyers have argued that her appeals to the Treasury Dept were on behalf of the National Bankers Association, a decades-old industry group that represents dozens of banks owned by minorities and women. The association’s membership includes OneUnited, and the bank’s top executive, Robert P. Cooper, was then the chairman-elect of the group. (Excerpt) Read more at nytimes.com

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ANALYSIS----CONG WATERS' HUSBAND HAS TIES TO BANK THAT RECEIVED FEDERAL BAILOUT FUNDS. Authorities need to determine whether Mr Waters colluded to engage in money-laundering activities which may have involved (1) violating state and federal RICO statutes; (2) securities fraud, (3) mail fraud (4) electronic fraud, (5) corporate theft (6) failing to report wrongdoing (7) breach of fiduciary duty (8) running a non-profit as an illegal racketeering enterprise, (9) accounting fraud, (10) using and creating slush funds.

ACTION NEEDED An external audit might uncover millions missing through government fraud.

Investigators might find that charges could be filed, into embezzlement schemes. Prosecutors might use RICO as a lever to pry open the massive cover-up of government corruption that is available through “discovery” within the named entities. The RICO device might refresh the memories of recalcitrant wrongdoers, and might expose primary evidence.

L/E might prosecute individuals along with their co-conspirators, and subsets of them, on RICO charges, on grounds that they conspired to keep taxpayers from learning of the scope and dimension of government fraud, and schemes designed to cheat taxpayers.

Phony official financial reports may have hidden theft; bank accountants and bookkeepers may have been employed in order to keep thievery secret.

Taxpayers demand to know if the Waters' received money from banks and other financial institutions in the form of loans, bonuses, equity positions in business entities doing business with the bank. Investigations may find that others signed off on paperwork and financial forms prepared or verified as true by the Waters.

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ANALYSIS Did the Waters file false bank loan applications to take equity positions in companies doing business with his bank, then conspire to payoff the bank loans by rigging and inflating bids for government contracts, then paid off bank loans when the tax monies rolled in? In raids of the suspects' homes and offices, law enforcement might find evidence of the financial trail that linked government fraud and monies to personal payments for cars, trips, luxury items. The FBI should interrogate the Waters to determine if the bank received anything else of value ---such as political cover, and whether collusion to misuse Congessional influence was involved.

FBI TIP PAGE http://tips.fbi.gov/ (you may remain anonymous)

Tax returns also tell a tale, particularly entries for "interest payments."

IRS TOLL-FREE 1-800-829-0433 (you may remain anonymous when reporting tax fraud)

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POSSIBLE CHARGES FACED BY CONG WATERS Official acts prohibited, misuse of Congressional funds, abuse of public office, violating oath of office, misuse of government position, abuse of government power; conflict of interest; influence buying; conspiracy to deceive; misuse of elective office, collusion, conspiracy to collude. Waters' official campaign finance records filed with the FEC, and state election commission, should be scrutinized for possible violations. Determine if names of Waters' contributors are legit and whether Waters illegally used campaign funds, and/or whether Waters received campaign contributions to influence Congressional votes. Waters may have colluded to give something of value, a govt gratuity, a job, etc, in exchange for getting govt monies to her husband.

The $700B TARP Bailout is now being called, "A MASTERFUL DECEIT." Paulson, et al, may not have pulled a fast one when he testified in favor of the TARP before Congress----but Congress' phony outrage is a puzzlement. If HR 1424 was a 'MASTERFUL DECEIT' then CONGRESS didn't do its job.

TITLE I—TROUBLED ASSETS RELIEF PROGRAM (required 'Congressional Oversight' sections listed)
Sec. 101. Purchases of troubled assets.
Sec. 102. Insurance of troubled assets.
Sec. 103. Considerations.
Sec. 104. Financial Stability Oversight Board.
Sec. 105. Reports.
Sec. 107. Contracting procedures.
Sec. 108. Conflicts of interest.
Sec. 111. Executive compensation and corporate governance.
Sec. 116. Oversight and audits.
Sec. 118. Funding.
Sec. 119. Judicial review and related matters.
Sec. 121. Special Inspector General for the Troubled Asset Relief Program.
Sec. 125. Congressional Oversight Panel.
Sec. 127. Cooperation with the FBI.
Sec. 129. Disclosures on exercise of loan authority.

In HR 1424, there are enough rules, regs and CONGRESSIONAL OVERSIGHT REQUIRED that not one Thin Dime should have been 'misspent.' So if anything crooked did go on Congress should look in a mirror. They dropped the ball -- again. And the same Gangster Government will run our healthcare.

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DID YOU KNOW? TARP was not designed to be a pool of money available for bailout of just anything that didn't move, like a couple of bankrupt unionized companies in the automobile industry. It was very specific in its purpose to provide liquidity to frozen banking and financial system and stave off the run on the banks (attack on the financial system, by proxy) and allow the 'netting' of the [frozen] assets on the books of financial institutions, in the aftermath of the fall of Lehman Bros and the run on trillions of dollars in money market funds in the consequent "breaking the buck" by private Reserve Primary Fund managed by Bruce Bent.

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